Half Yearly Report

RNS Number : 5311L

Michael Page International PLC

13 August 2013

 



13 August 2013

 

PageGroup

 

Half Year Results for the Period Ended 30 June 2013

Michael Page International plc ("PageGroup"), the specialist professional recruitment company, announces its unaudited half year results for the period ended 30 June 2013.

Financial summary (6 months to 30 June 2013)	2013	2012	Change	Change CER*
Revenue	£503.2m	£502.6m	+0.1%	-0.9%
Gross profit	£261.9m	£273.9m	-4.4%	-5.2%
Operating profit before exceptional items †	£32.1m	£36.0m	-10.8%	-11.9%
Profit before tax before exceptional items	£32.0m	£36.1m	-11.3%
Basic earnings per share before exceptional items	7.0p	7.9p	-11.4%
Diluted earnings per share before exceptional items	7.0p	7.8p	-10.3%
Operating profit	£32.1m	£28.2m	+14.1%
Profit before tax	£32.0m	£28.2m	+13.4%
Basic earnings per share	7.0p	6.1p	+14.8%
Diluted earnings per share	7.0p	6.1p	+14.8%
Interim dividend per share	3.25p	3.25p	-

*Constant Exchange Rates      † Exceptional items in the prior year relate to a regional management restructure

Highlights

·      Group gross profit  -4.4% year-on-year, the business is profitable in all established markets

·      Signs of improvement in many markets as the period progressed

·      77% of gross profit generated from outside the UK

·      59% of gross profit generated from non Finance and Accounting disciplines

·      Gross profit from permanent placements reduced by 6% (-7%*)

·      Gross profit from temporary placements grew by 2% (+1%*)

·     Continued focus on operational efficiency, with headcount down by 144 (-2.8%) in first half of 2013, primarily in operational support

·      Strong balance sheet with net cash at 30 June 2013 of £47.6m

·      Interim dividend held at 3.25p

Commenting on the results, Steve Ingham, Chief Executive Officer of PageGroup, said:

"PageGroup delivered a robust performance throughout the first half, against a backdrop of challenging market conditions across most of our regions, reporting gross profit of £261.9m, down 4.4% year-on-year. Market conditions also showed signs of improvement during the second quarter of 2013, with a 6.6% increase in gross profit compared to the first quarter.

"We have made excellent progress on our key strategic objectives following the management changes last year:

·      continued investment in each of our 5 high potential markets: China, South East Asia, Germany, Latin America and the USA;

·      increased focus on consistency and efficiency in our operational support teams;

·      the turnaround of our USA business, where we are up 27%* in gross profit this year; and

·      further discipline diversification.

"During the six months to June we saw good performances in a number of regions, most notably in North America. Our offices in Japan, Mexico, Spain and the Middle East also performed particularly well, as did some smaller and newer businesses in Europe, Latin America and Asia. However, in Australia, our business experienced a difficult first half.

"As we indicated earlier in the year, we continue to manage our cost base actively, both to take account of market conditions as well as to improve the Group's operating performance. As a result, headcount has reduced by 144 since the start of the year, primarily in operational support staff.

"Our focus remains fixed on our long-term growth and profit objectives. We will continue to invest in our key, high-potential markets, to manage our fee earner headcount actively, reflecting market conditions and to seek out efficiencies to drive down the costs of operational support. Combined, these initiatives will deliver long-term profitable growth for our shareholders.

"Activity levels remained strong throughout the second quarter, but with difficult conditions likely to continue in several markets and as this is the seasonally quieter summer period in both Continental Europe and the UK, we expect Q3 will be another challenging quarter. The Group is financially strong, with net cash of £47.6m and remains well-placed to take advantage of any recovery in the markets in which we operate. At this time, we expect our full year operating profit from trading activities to be in line with current market estimates**."

** Reuters £70.9m

Analyst meeting

The company will be presenting to a meeting of analysts at 9.00am today.  The presentation and a recording of the meeting will be available on the company's website later on today at http://www.page.com/investors/reports-and-presentations/presentations-and-webcasts/2013.aspx

Enquiries:

PageGroup	01932 264144
Steve Ingham, Chief Executive Officer
Andrew Bracey, Chief Financial Officer
FTI Consulting	020 7269 7291
Richard Mountain / Susanne Yule

INTERIM MANAGEMENT REPORT

To the members of Michael Page International plc

Cautionary Statement

This Interim Management Report ("IMR") has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose. This IMR contains certain forward-looking statements. These statements are made by the directors in good faith based on the information available to them up to the time of their approval of this report and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information.

This IMR has been prepared for the Group as a whole and therefore gives greater emphasis to those matters that are significant to Michael Page International plc and its subsidiary undertakings when viewed as a whole.

GROUP STRATEGY

PageGroup's strategy is to expand and diversify the Group by industry sectors, by professional disciplines as well as by geography. This includes the Page Personnel, Michael Page and Page Executive businesses; the clear objective is to be the leading specialist recruitment consultancy in each of our chosen markets. As recruitment activity is dependent upon economic cycles, by being more diverse the dependency on individual businesses or markets is reduced making the overall Group more resilient. This strategy is pursued entirely through the organic growth of existing and new teams, offices, disciplines and countries, with a consistent team and meritocratic culture.

Our organic growth is achieved by drawing upon the skills and experiences of proven PageGroup management, ensuring we have the best and most experienced, home-grown talent in each key role. When we invest in a new business, we do so only with a long-term objective and in the knowledge that at some point there will be periods when economic activity slows. While it is difficult to predict accurately when these slowdowns will occur and how severe they will be, it has been our practice in the past and our intention in the future to maintain our presence in our chosen markets, but with close control over our cost base. Our team-based structure and primarily profit-share business model is scalable and the small team size also means that we can increase rapidly our headcount to achieve and maintain growth.

The focus of our organic growth in the last eleven years has been to grow in emerging markets, where the outsourcing of recruitment particularly for specialist roles is underdeveloped and where there is limited competition. In many of these markets, we have achieved a market-leading position and intend to embrace fully the opportunity by investing rapidly in headcount and opening in new cities and countries. The investment to take advantage of these opportunities in terms of new headcount, international transfers of management, new office space and start-up losses will limit short-term profitability but should provide a substantial platform for longer term returns.

Our intention is always to maintain a strong balance sheet. With uncertainty around the length and depth of economic slowdowns, a strong balance sheet is essential to support the Group through tougher periods and, when conditions improve and the businesses start growing, to fund increased working capital requirements. Any surplus cash is returned to shareholders through dividends and share repurchases. 

Last year we made some key management changes with very specific objectives in mind.  The first of the four most significant is that as a more unified business we have absolute clarity on our geographic priorities for investment.  We believe the greatest opportunities for long-term growth are the 5 markets of China, South East Asia, Germany, Latin America and the USA. Our platform across these 5 markets gives us an enviable competitive advantage; with 45 offices and 1,436 headcount, they represent 30% of our total business.  We intend to invest in these markets consistently every year.

In part, this investment will be funded by the second key objective that is now possible as a result of the management changes.  We are working to be consistent and therefore more efficient in the operational support that underpins the business. Already this has meant that our operational support headcount has fallen significantly this year. Many of these reductions were made across our European businesses. Although the costs of reducing headcount are high in Europe, we have still made substantial cost savings and these changes will therefore improve conversion rates in the future.

The third objective that resulted from the changes was to put a key high potential market, North America, back on track.

The fourth is to diversify by discipline, rolling out existing and new disciplines across our office network.

While investing in our 5 key high potential markets, we will continue to manage all our other businesses according to the market conditions they experience.  This, we believe, will continue to deliver the best long-term profitable growth opportunity for our shareholders.

GROUP RESULTS

The Group's revenue for the six months ended 30 June 2013 increased by 0.1% to £503.2m (2012: £502.6m) and gross profit decreased by 4.4% to £261.9m (2012: £273.9m). At constant exchange rates, the Group's revenue decreased by 0.9% and gross profit by 5.2%. Typically, as economic conditions become more uncertain, permanent recruitment activity slows compared to temporary recruitment. This is evidenced in the first half, where the mix of the Group's revenue and gross profit between permanent and temporary placements decreased slightly to 42:58 (2012: 44:56) and 77:23 (2012: 79:21), respectively. The gross margin on temporary placements in the first half of 2013 fell slightly to 20.2% (2012: 20.8%). Pricing has remained relatively stable throughout the first half of 2013, with a stronger pricing environment in rapidly growing markets, being offset by competitive pressures in weaker markets.

As the demand for recruitment services increases, the number of positions to be filled rises, candidate shortages begin to emerge, the time-to-hire period starts to reduce and there is less pressure on pricing. With the ongoing uncertainty and lack of market confidence that impacted parts of the Group during the first half of 2013, many of these factors trended negatively, albeit to differing degrees in our different geographic regions, creating an environment where productivity remained at relatively low levels with less gross profit per fee earner able to be generated. The Group's strategy of growing organically, as well as maintaining market presence and a degree of spare capacity, means that the Group is operationally geared, which resulted in a proportionally larger decrease in operating profit than in gross profit. This conversion of gross profit to operating profit was also reduced by the amount of investment being made to facilitate and maintain growth in our newer markets and in markets where we see longer term potential.

Our focus remains on improving conversion with a strong focus on operational efficiency. In the first half, headcount was reduced by 144, the vast majority of which were in our operational support functions. As the largest share of this reduction was from our European operations, the one-off costs associated will offset the savings in the first half, with some benefit in the second half, and the full benefit in 2014.

With a 5% decrease in gross profit, continued weakness in many of the Group's markets and investment for the future, operating profit from trading activities for the first half of 2013 decreased to £32.1m (2012: £36.0m before exceptional items). The Group's conversion rate of gross profit to operating profit from trading activities is now 12.3% (2012: 13.1% before exceptional items).

EUROPE, MIDDLE EAST AND AFRICA (EMEA)

Europe, Middle East and Africa (EMEA) is the Group's largest region, contributing 41% of Group gross profit in the first half. Revenue in the region decreased by 2.9% to £205.3m (2012: £211.5m) and gross profit decreased by 9.2% to £107.1m (2012: £117.9m). In constant currency, revenue decreased by 5.8% on the first half of 2012 and gross profit decreased by 11.7%. The 9.2% decrease in gross profit resulted in a 22.2% decrease in operating profit for the first half of 2013 to £10.4m (2012: £13.4m before exceptional items), and a conversion rate of 9.7% (2012: 11.3%).

Market conditions remained challenging across the region, but showed signs of improvement through the second quarter. 10 of our countries in this region grew in constant currency compared to the first half of 2012, including Spain, Portugal, Turkey, Sweden, Poland, Russia and the UAE. Trading conditions in our Northern European businesses continued to remain challenging, with economic uncertainty further impacting market confidence.

Our larger and predominantly permanent recruitment businesses in France and Germany, representing 49% of the region, continued to be impacted by the wider Eurozone issues, but in the circumstances performed well, showing improvement as the first half progressed. Reflecting these trading conditions, headcount across the region decreased by 159 (8%) in the first half of 2013 to 1,881 at the end of June 2013 (2,040 at 31 December 2012), the majority of which were in operational support.

UNITED KINGDOM

In the UK, representing 23% of the Group's gross profit in the first half, both revenue at £146.1m (2012: £146.0m), and gross profit at £61.4m (2012: £61.7m) were broadly flat, while operating profit was up 11.2% at £9.6m (2012: £8.6m before exceptional items).

Market conditions remained tough but stable throughout the first half of 2013, against which we delivered a robust performance. We continued to capitalise on our discipline diversification and depth of management experience, with our Logistics, Procurement & Supply Chain, Buying & Merchandising, Digital and Public Sector businesses delivering the strongest performances. Overall, operating profit increased by 11%, with the conversion rate up at 15.6% (2012: 14.0%). Headcount in the UK was up 2% during the first half of 2013 to 1,256 at the end of June 2013 (1,237 at 31 December 2012), and we are well positioned to take advantage of any recovery.

ASIA PACIFIC

In Asia Pacific, representing 21% of the Group's gross profit in the first half, revenue increased by 1.2% to a record £95.7m (2012: £94.6m) and gross profit decreased by 4.5% to £54.3m (2012: £56.9m). In constant currency, revenue increased by 1.6% and gross profit decreased by 4.4%. Operating profit fell by 30.4% to £9.6m (2012: £13.8m), resulting in a decrease in the conversion rate to 17.7% (2012: 24.3%).

In Australia, our largest business in the region, gross profit was down 20% in constant currency as we continued to be impacted by the downturn in the mining and commodities sector. Market conditions here, particularly in Western Australia, remain difficult but stable. In Asia, comprising 13% of the Group and 61% of the Asia Pacific region, we had a record first half in many of our businesses and, although trading conditions in China have become tougher since last year, activity levels remain strong. Gross profit in Asia grew 8% in constant currency, with our newer businesses in Kuala Lumpur and Taipei also progressing well. Headcount across the region increased by 40 (4%) in the first half of 2013 to 1,076 at the end of June 2013 (1,036 at 31 December 2012) and, assuming market conditions remain strong, we expect that further headcount will be added during the second half of 2013.

THE AMERICAS

In the Americas, representing 15% of the Group's gross profit in the first half, revenue increased by 11.2% to £56.2m (2012: £50.6m) and gross profit increased by 4.5% to £39.1m (2012: £37.4m). In constant currency, revenue increased by 12.3% and gross profit increased by 5.9%. Operating profit increased significantly to £2.5m (2012: £0.2m), with a conversion rate of 6.4% (2012: 0.5%).

In North America, our businesses performed extremely well, particularly in the USA, with gross profit up by 23% in constant currency. Market sentiment is improving in North America and this, along with last year's changes to the top level management and investment to strengthen the teams across the region, has driven improvements in both the conversion rate and operating profit.

In Latin America, gross profit was down 2% year-on-year in constant currency. In Brazil, where we are the clear market leader, we saw signs of improvement as the first half progressed. With the exception of Argentina, where trading remains difficult, our other businesses in Latin America grew strongly, with record gross profit performances in both Mexico and Colombia.

Our new operating software was successfully piloted in our Boston office in May. The roll-out will begin in the rest of North America before being extended across the wider Group.

Headcount across the region decreased by 44 (6%) in the first half of 2013 to 742 at the end of June 2013 (786 at 31 December 2012). However, with increasingly stronger quarters, improving economies in North America and Brazil, as well as a stronger management team, we feel increasingly optimistic about the outlook for this region.

OPERATING PROFIT AND CONVERSION RATES

As a result of the Group's organic long-term growth strategy, tight control on costs and profit-based bonuses, we have a business model that is operationally geared. The majority of our cost base, around 75%, relates to our staff, with the other main components being property and information technology costs. With a strategy of organic growth, the Group incurs start-up costs and operating losses as investments are made to grow existing and new businesses, open new offices and launch businesses in new countries. Furthermore, significant increases in headcount mean that it takes time to train staff before they become fully productive. These characteristics of our growth strategy and the levels of investment affect the conversion rates in any one reporting period. Generally, in years when economic conditions are benign, revenue and gross profit grow. Operating profit grows at a faster rate due to a combination of higher productivity, stronger pricing and greater utilisation of infrastructure. In order to grow, we need to increase our headcount and ensure that we have the infrastructure to house and support them. When economic conditions weaken and recruitment activity slows, these factors work in reverse and are compounded by a shortening of earnings visibility.

The majority of our permanent placement activity is undertaken on a contingent basis, which means that on those assignments we only generate revenue when a candidate is successfully placed in a role. Our short-term visibility on these earnings is provided by the number of assignments we are working on, the number of candidates we have at interview and the stage they are at in the interview process. The average time to complete a placement, from taking on an assignment to successfully placing a candidate, tends to lengthen in a downturn, reducing productivity and the risk of the candidate being rejected or the assignment being cancelled increases, thereby further reducing our earnings visibility.

In a downturn, activity levels can slow quickly, causing revenue to decline quickly due to the contingent nature of a large proportion of our placements. The main opportunity for reducing our own cost base is headcount, but these reductions tend to lag the declines in revenue due to the shortening visibility. The majority of the initial reductions in our headcount occur through natural attrition, but these are treated as a component of our normal operating expenses and do not incur significant restructuring charges. However, as greater reductions become necessary, such charges may be incurred.

As economic conditions begin to improve, the confidence levels of both candidates and clients also improves and the rate at which people change jobs starts to increase. This increase in activity is serviced from the spare capacity we maintain during a downturn and therefore profits have the potential to increase rapidly. As different markets recover and grow at different rates, we invest in infrastructure and additional headcount in some markets to maintain their growth, while carrying some spare capacity in others. Where possible, we redeploy resources to match market conditions. The Group's conversion rate for the period was 12.3% (2012: 13.1%), which reflects the ongoing difficult market conditions seen through the first half of 2013. The movement in the conversion rates of the four regions and the levels of conversion now being achieved reflects the market conditions in those regions, the levels of investment in each region and the levels of spare capacity still available to be utilised.

Administrative expenses in the year decreased by 3.4% to £229.8m (2012: £237.8m). Administrative expenses included £5.0m of share-based payment charges (2012: £7.9m) in respect of the Group's deferred annual bonus scheme, long-term incentive plan and share option schemes.

TAXATION AND EARNINGS PER SHARE

The charge for taxation is based on the expected effective annual tax rate of 33.0% (2012: 33.5%) on profit before taxation. Excluding French Professional taxes, the effective rate would be 29.8%.

Basic and diluted earnings per share for the six months ended 30 June 2013 were both 7.0p (2012: 6.1p).

CASH FLOW

The Group started the year with net cash of £61.4m. In the first half we generated £17.3m from operations after funding an increase in working capital of £27.1m, primarily due to the timing of bonus payments for 2012. Tax paid was £12.3m and net capital expenditure was £6.6m, with net interest paid of £0.1m. During the first half, £7.9m was received from the exercise of share options and dividends of £20.8m were paid to shareholders. After favourable currency movements of £0.8m, the Group had net cash of £47.6m at 30 June 2013.

INTANGIBLE ASSETS

In May, we commenced operating our new software in Boston in the USA, and will now roll it out across the business. Accordingly, we began the amortisation of this intangible asset in 2013.  The full year charge is expected to be c. £5.4m, with £1.4m of this in the first half.

DIVIDENDS AND SHARE REPURCHASES

It is the Board's intention to pay dividends at a level that it believes is sustainable throughout economic cycles and to continue to use share repurchases to return surplus cash to shareholders. The Board remains confident of the Group's longer term prospects and has therefore decided to maintain the interim dividend at 3.25p (2012: 3.25p) per share. The interim dividend will be paid on 4 October 2013 to shareholders on the register at 6 September 2013.

No shares were repurchased into the employee benefit trust or cancelled during the first half.

CURRENT TRADING AND OUTLOOK

Overall, we had an improved second quarter and a robust first half.

It is a clear priority that we continue to manage the cost base to reflect market conditions, while investing to create a platform for greater growth when markets improve. We believe strongly that we have the balance right and we remain profitable in all established markets.

Activity levels remained strong throughout the second quarter, but with difficult conditions likely to continue in several markets and as this is the seasonally quieter summer period in both Continental Europe and the UK, we expect Q3 will be another challenging quarter. The Group is financially strong, with net cash of £47.6m and we remain well-placed to take advantage of any recovery in the markets in which we operate. At this time, we expect our full year operating profit from trading activities to be in line with current market estimates**.

KEY PERFORMANCE INDICATORS

Financial and non-financial key performance indicators (KPIs) used by the Board to monitor progress are listed in the table below. The source of data and calculation methods year-on-year are on a consistent basis.

KPI	H1 2013	H1 2012	Definition, method of calculation and analysis
Gross margin	52.0%	54.5%	Gross profit as a percentage of revenue. Gross margin has decreased, largely as a result of the mix of permanent and temporary placements. In tougher trading conditions, there tends to be a swing to lower margin temporary placements. Source: Condensed consolidated income statement in the financial statements.
Conversion (before exceptional items)	12.3%	13.1%	Operating profit as a percentage of gross profit showing the Group's effectiveness at controlling the costs and expenses associated with its normal business operations and the level of investment for future growth. Conversion has declined compared to last year, reflecting the impact of the economic uncertainty on demand for the Group's services, lower productivity and the investment in maintaining market presence and carrying spare capacity. Source: Condensed consolidated income statement in the financial statements.
Productivity (gross profit per fee earner)	£72.0k	£72.5k	Represents productivity of fee earners and is calculated by dividing the gross profit for the period by the average number of fee earners and directors. The higher the number, the higher their productivity. Productivity is a function of the speed of change in the numbers and the experience of fee earners, the impact of pricing and the general conditions of the recruitment market. Productivity has remained broadly flat, with the small decrease a result of the general worsening of market conditions compared to the first half last year. Source: Internal data.
Fee earner : support staff ratio	72:28	71:29	Represents the balance between operational and non-operational staff. The balance in the period reflects the relative reduction in support staff, as a result of ongoing operational efficiencies across the Group, against the movement in the number of fee earners. Source: Internal data.
Debtor days (30 June)	48	49	Represents the length of time before the Group receives payments from its debtors. Calculated by comparing how many days' billings it takes to cover the debtor balance. The decrease in the period reflects the continued focus on cash collections and a greater proportion of temporary business, with the average debtor days being lower for the temporary business compared to the permanent business. Source: Internal data.

The movements in KPIs are in line with expectations.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Group's strategy are subject to a number of risks. The following section comprises a summary of the main risks PageGroup believes could potentially impact the Group's operating and financial performance.

People

The resignation of key individuals and the inability to recruit talented people with the right skill-sets could adversely affect the Group's results. This is further compounded by the Group's organic growth strategy and its policy of not externally hiring senior operational positions. Mitigation of this risk is achieved by succession planning, training and development of staff, competitive pay structures and share plans linked to the Group's results and career progression.

Macroeconomic environment

Recruitment activity is largely driven by economic cycles and the levels of business confidence. The Board look to reduce the Group's cyclical risk by diversifying the business by expanding geographically, increasing the number of disciplines, building part qualified and clerical businesses and continuing to build the temporary business. A substantial portion of the Group's gross profit arises from fees that are contingent upon the successful placement of a candidate in a position. If a client cancels the assignment at any stage in the process, the Group receives no remuneration. As a consequence, the Group's visibility of gross profits is generally quite short and reduces further during periods of economic downturn.

Competition

The degree of competition varies in each of the Group's main regions. In the UK, Australia and North America, the recruitment market is well developed, highly competitive and fragmented. The characteristics of a developed market are greater competition for clients and candidates, as well as pricing pressure. In the majority of EMEA, Latin America and Asia, the recruitment market is generally less-developed, with a large proportion of all recruitment being carried out by companies' internal resources, rather than through recruitment specialists. This is changing due to changes in legislation, increasing job mobility and the difficulty internal resources face in sourcing suitably qualified candidates and managing increasing levels of compliance. If the Group does not continue to compete in its markets effectively, by hiring new staff, opening and expanding offices and continuing the discipline roll-outs, there is a risk that competitors may beat us to key strategic opportunities, which may result in lost business and a reduction in market share. This risk is mitigated by meetings of the Board, Executive Board and Regional and Country Management Boards where Group strategy is continually reviewed and decisions made over the allocation of the Group's resources, principally people.

Technology

The Group is reliant on a number of technology systems to provide services to clients and candidates. These systems are dependent on a number of important suppliers that provide the technology infrastructure and disaster recovery solutions. The performance of these suppliers is continually monitored to ensure business critical services are available and maintained as far as practically possible. Due to the rapid advancement of technology, there is a risk that systems could become outdated with the potential to affect efficiency and have an impact on revenue and client service. This risk is mitigated by regular reviews of the Group's technology strategy to ensure that it supports the overall Group strategy. 

Legal

The Group operates in a large number of jurisdictions that have varying legal and compliance regulations. The Group takes its responsibilities seriously and ensures that its policies, systems and procedures are continually updated to reflect best practice and to comply with the legal requirements in all the markets in which it operates. In order to reduce the legal and compliance risks, fee earners and support staff receive regular training and updates of changes in legal and compliance requirements.

Financial

The Group has a risk management process to assess risks and places significant emphasis on maintaining adequate financial and management controls. The risk management process is viewed as a dynamic part of operations and is assessed globally on an annual basis.  The Group has developed a framework to manage risk and respond to the global financial crisis, with emphasis upon liquidity as well as credit exposure, management of currency risk and business and operational continuity.

TREASURY MANAGEMENT, BANK FACILITIES AND CURRENCY RISK

It is the Directors' intention to continue to finance the activities and development of the Group from retained earnings and to operate the Group's business while maintaining a strong balance sheet position. In a generally benign economic environment this equates to maintaining the Group's net cash/debt position within a relatively narrow band, with cash generated in excess of operational and investment requirements being returned to shareholders. In a period of economic uncertainty, a more cautious funding position will be adopted, with the Group being managed in a net cash position.

Cash surpluses are invested in short-term deposits, with any working capital requirements being provided from Group cash resources, Group facilities, or by local overdraft facilities. The Group has a multi-currency notional cash pool between the Eurozone subsidiaries and the UK-based Group Treasury subsidiary. The structure facilitates interest and balance compensation of cash and bank overdrafts. The Group has an Invoice Financing facility with HSBC Bank, the availability of which is limited to the level of UK trade receivable available for financing. This facility is subject to conventional banking covenants.

The main functional currencies of the Group are Sterling, Euro, Australian Dollar and Brazilian Real. The Group does not have material transactional currency exposures, nor is there a material exposure to foreign denominated monetary assets and liabilities. The Group is exposed to foreign currency translation differences in accounting for its overseas operations. Our policy is not to hedge this exposure.

In certain cases, where the Group gives or receives short-term loans to and from other Group companies with different reporting currencies, it may use short-dated foreign exchange swap derivative financial instruments to manage the currency and interest rate exposure that arises on these loans. It is the Group's policy not to seek to designate these derivatives as hedges.

GOING CONCERN

The Board has undertaken a recent and thorough review of the Group's forecasts and associated risks and sensitivities. Despite the significant uncertainty in the economy and its inherent risk and impact on the business, the Board has concluded, given the level of cash in the business and Group borrowing facilities, the geographical and discipline diversification, limited concentration risk, as well as the ability to manage the cost base, that the Group has adequate resources to continue in operational existence for the foreseeable future being a period of at least 12 months.

Page House

The Bourne Business Park

1 Dashwood Lang Road

Addlestone

Weybridge

Surrey

KT15 2QW

By order of the Board,

Steve Ingham                                 Andrew Bracey

Chief Executive Officer                    Chief Financial Officer

13 August 2013                             13 August 2013

INDEPENDENT REVIEW REPORT TO MICHAEL PAGE INTERNATIONAL PLC

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2013 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated statement of cash flows and related notes 1 to 14. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

Ernst & Young LLP

London

13 August 2013

 

Condensed Consolidated Income Statement

Six months ended 30 June 2013

			Six months ended				Year ended
			30 June		30 June		31 December
			2013		2012		2012
			Unaudited		Unaudited		Audited
	Note		£'000		£'000		£'000
Revenue	3		503,248		502,629		989,882
Cost of sales			(241,308)		(228,774)		(463,013)
Gross profit	3		261,940		273,855		526,869
Administrative expenses			(229,820)		(237,848)		(461,748)
Operating profit before exceptional items	3		32,120		36,007		65,121
Exceptional items	4		-		(7,845)		(7,834)
Operating profit after exceptional items	3		32,120		28,162		57,287
Financial income	5		251		423		907
Financial expenses	5		(350)		(342)		(1,191)
Profit before tax	3		32,021		28,243		57,003
Income tax expense	6		(10,567)		(9,475)		(20,806)
Profit for the period			21,454		18,768		36,197
Attributable to: Owners of the parent			21,454		18,768		36,197
Earnings per share
Basic earnings per share (pence)	9		7.0		6.1		11.9
Diluted earnings per share (pence)	9		7.0		6.1		11.7

The above results all relate to continuing operations.

Condensed Consolidated Statement of Comprehensive Income

Six months ended 30 June 2013

			Six months ended				Year ended
			30 June		30 June		31 December
			2013		2012		2012
			Unaudited		Unaudited		Audited
			£'000		£'000		£'000
Profit for the period			21,454		18,768		36,197
Other comprehensive income/(loss) for the period
Items that may subsequently be reclassified to profit and loss: Currency translation differences			2,567		(3,815)		(5,171)
Total comprehensive income for the period			24,021		14,953		31,026
Attributable to:
Owners of the parent			24,021		14,953		31,026

Condensed Consolidated Balance Sheet

At 30 June 2013

		Note		30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000		31 December 2012 Audited £'000
Non-current assets
Property, plant and equipment		10		27,503		31,685		28,913
Intangible assets  - Goodwill and other intangible				2,036		1,950		2,091
- Computer software				42,613		42,198		42,006
Deferred tax assets				9,908		8,548		9,192
Other receivables		11		3,827		5,209		3,310
				85,887		89,590		85,512
Current assets
Trade and other receivables		11		198,944		201,558		182,507
Current tax receivable				6,970		3,981		6,970
Cash and cash equivalents		14		53,981		57,443		70,769
				259,895		262,982		260,246
Total assets		3		345,782		352,572		345,758
Current liabilities
Trade and other payables		12		(127,043)		(142,673)		(138,733)
Bank overdrafts		14		(6,366)		(25,031)		(9,396)
Current tax payable				(11,107)		(2,581)		(12,612)
				(144,516)		(170,285)		(160,741)
Net current assets				115,379		92,697		99,505
Non-current liabilities
Other payables		12		(3,074)		(2,622)		(2,779)
Deferred tax liabilities				(851)		(233)		(850)
				(3,925)		(2,855)		(3,629)
Total liabilities		3		(148,441)		(173,140)		(164,370)
Net assets				197,341		179,432		181,388
Capital and reserves
Called-up share capital				3,194		3,173		3,178
Share premium				66,138		58,470		60,221
Capital redemption reserve				932		932		932
Reserve for shares held in the employee benefit trust				(51,907)		(57,277)		(62,071)
Currency translation reserve				27,682		26,471		25,115
Retained earnings				151,302		147,663		154,013
Total equity				197,341		179,432		181,388

Condensed Consolidated Statement of Changes in Equity

Six months ended 30 June 2013

	Called-up share capital £'000	Share premium £'000	Capital redemption reserve £'000	Reserve for  shares held in the employee benefit trust £'000	Currency translation reserve £'000	Retained earnings £'000	Total equity £'000
Balance at 1 January 2012	3,167	57,215	932	(65,652)	30,286	154,650	180,598
Currency translation differences	-	-	-	-	(3,815)	-	(3,815)
Net expense recognised directly in equity	-	-	-	-	(3,815)	-	(3,815)
Profit for the six months ended 30 June 2012	-	-	-	-	-	18,768	18,768
Total comprehensive (loss)/income for the period	-	-	-	-	(3,815)	18,768	14,953
Purchase of shares held in employee benefit trust	-	-	-	(9,388)	-	-	(9,388)
Exercise of share plans	6	1,255	-	-	-	4,271	5,532
Reserve transfer when shares held in the employee benefit trust vest	-	-	-	17,763	-	(17,763)	-
Credit in respect of share schemes	-	-	-	-	-	7,461	7,461
Credit in respect of tax on share schemes	-	-	-	-	-	1,054	1,054
Dividends	-	-	-	-	-	(20,778)	(20,778)
	6	1,255	-	8,375	-	(25,755)	(16,119)
Balance at 30 June 2012	3,173	58,470	932	(57,277)	26,471	147,663	179,432
Currency translation differences	-	-	-	-	(1,356)	-	(1,356)
Net expense recognised directly in equity	-	-	-	-	(1,356)	-	(1,356)
Profit for the six months ended 31 December 2012	-	-	-	-	-	17,429	17,429
Total comprehensive (loss)/income for the period	-	-	-	-	(1,356)	17,429	16,073
Purchases of shares held in employee benefit trust	-	-	-	(8,564)	-	-	(8,564)
Exercise of share plans	5	1,751	-	-	-	528	2,284
Reserve transfer when shares held in the employee benefit trust vest	-	-	-	3,770	-	(3,770)	-
Credit in respect of share schemes	-	-	-	-	-	4,382	4,382
Debit in respect of tax on share schemes						(2,363)	(2,363)
Dividends	-	-	-	-	-	(9,856)	(9,856)
	5	1,751	-	(4,794)	-	(11,079)	(14,117)
Balance at 31 December 2012 and 1 January 2013	3,178	60,221	932	(62,071)	25,115	154,013	181,388
Currency translation differences	-	-	-	-	2,567	-	2,567
Net income recognised directly in equity	-	-	-	-	2,567	-	2,567
Profit for the six months ended 30 June 2013	-	-	-	-	-	21,454	21,454
Total comprehensive income for the period	-	-	-	-	2,567	21,454	24,021
Exercise of share plans	16	5,917	-	-	-	2,012	7,945
Reserve transfer when shares held in the employee benefit trust vest	-	-	-	10,164	-	(10,164)	-
Credit in respect of share schemes	-	-	-	-	-	4,117	4,117
Credit in respect of tax on share schemes	-	-	-	-	-	668	668
Dividends	-	-	-	-	-	(20,798)	(20,798)
	16	5,917	-	10,164	-	(24,165)	(8,068)
Balance at 30 June 2013	3,194	66,138	932	(51,907)	27,682	151,302	197,341

Condensed Consolidated Statement of Cash Flows

Six months ended 30 June 2013

			Six months ended				Year ended
	Note		30 June  2013 Unaudited £'000		30 June  2012 Unaudited £'000		31 December 2012 Audited £'000
Cash generated from underlying operations	13		17,325		35,320		94,471
Exceptional items	4		-		(7,845)		(7,834)
Cash generated from operations			17,325		27,475		86,637
Income tax paid			(12,331)		(17,532)		(24,371)
Net cash from operating activities			4,994		9,943		62,266
Cash flows from investing activities
Purchases of property, plant and equipment			(4,325)		(4,627)		(7,919)
Purchases of intangible assets			(2,582)		(5,013)		(9,012)
Proceeds from the sale of property, plant and equipment, and computer software			310		35		449
Interest received			251		423		907
Net cash used in investing activities			(6,346)		(9,182)		(15,575)
Cash flows from financing activities
Dividends paid			(20,798)		(20,778)		(30,634)
Interest paid			(364)		(344)		(1,218)
Issue of own shares for the exercise of options			7,945		5,532		7,816
Purchase of shares into the employee benefit trust			-		(9,388)		(17,952)
Net cash used in financing activities			(13,217)		(24,978)		(41,988)
Net (decrease)/increase  in cash and cash equivalents			(14,569)		(24,217)		4,703
Cash and cash equivalents at the beginning of the period			61,373		58,168		58,168
Exchange gain/(loss) on cash and cash equivalents			811		(1,539)		(1,498)
Cash and cash equivalents at the end of the period	14		47,615		32,412		61,373

Notes to the condensed set of interim financial statements

Six months ended 30 June 2013

1.         General information

The information for the year ended 31 December 2012 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2.         Accounting policies

Basis of preparation

The unaudited interim condensed consolidated financial statements for the six months ended 30 June 2013 have been prepared in accordance with IAS 34 'Interim financial reporting' and with the Disclosure and Transparency Rules of the Financial Services Authority.  

The unaudited interim condensed consolidated financial statements do not constitute the Group's statutory financial statements.  The Group's most recent statutory financial statements, which comprise the annual report and audited financial statements for the year ended 31 December 2012, were approved by the directors on 5 March 2013.  The interim condensed consolidated financial statements should be read in conjunction with the Annual Report and Accounts for the year ended 31 December 2012, which have been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by the European Union.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the interim management report. The interim management report also includes a summary of the Group's financial position, its cash flows and its borrowing facilities.  

The directors believe the Group is well placed to manage its business risks successfully, despite the current uncertain economic outlook. The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current committed facilities.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly financial report.

New accounting standards, interpretations and amendments

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ending 31 December 2012, except for the adoption of new standards and interpretations effective as of 1 January 2013.

None of the new standards and interpretations adopted had a material impact on the consolidated financial statements of the Group other than as described below:                                                                             

IAS 1 Presentation of Items of Other Comprehensive Income - Amendments to IAS 1                                                                                                                                  

The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income (OCI). Items that could be reclassified (or recycled) to profit or loss at a future point in time (e.g., net gain on hedge of net investment, exchange differences on translation of foreign operations, net movement on cash flow hedges and net loss or gain on available-for-sale financial assets) now have to be presented separately from items that will never be reclassified (e.g., actuarial gains and losses on defined benefit plans and revaluation of land and buildings). The amendment affected presentation only and had no impact on the Group's financial position or performance.

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.                                                                                                                                   

3.         Segment reporting

All revenues disclosed are derived from external customers.

The accounting policies of the reportable segments are the same as the Group's accounting policies. Segment operating profit represents the profit earned by each segment including allocation of central administration cost. This is the measure reported to the Group's Chief Executive Officer for the purpose of resource allocation and assessment of segment performance.

a)         Revenue, gross profit and operating profit by reportable segment

		Revenue							Gross Profit
		Six months ended					Year ended 31 December 2012 Audited £'000		Six months ended				Year ended 31 December 2012 Audited £'000
			30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000				30 June     2013 Unaudited £'000		30 June 2012 Unaudited £'000
EMEA			205,250		211,458		403,223		107,137		117,934		218,382
United Kingdom			146,050		146,012		295,876		61,414		61,687		121,408
Asia Pacific	Australia and New Zealand		57,054		59,711		119,344		21,400		26,343		51,677
	Other		38,672		34,888		72,853		32,907		30,508		63,177
	Total		95,726		94,599		192,197		54,307		56,851		114,854
Americas			56,222		50,560		98,586		39,082		37,383		72,225
			503,248		502,629		989,882		261,940		273,855		526,869

			Operating Profit
			Six months ended				Year ended
			30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000		31 December 2012 Audited £'000
EMEA			10,408		13,385		22,070
United Kingdom			9,579		8,614		15,771
Asia Pacific	Australia and New Zealand		3,367		7,679		14,164
	Other		6,248		6,131		14,803
	Total		9,615		13,810		28,967
Americas			2,518		198		(1,687)
Operating profit			32,120		36,007		65,121
Exceptional items (note 4)			-		(7,845)		(7,834)
Operating profit after exceptional items			32,120		28,162		57,287
Financial (expense)/ income			(99)		81		(284)
Profit before tax			32,021		28,243		57,003

The above analysis by destination is not materially different to analysis by origin.

The analysis below is of the carrying amount of reportable segment assets and liabilities and non-current assets. Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. The individual reportable segments exclude income tax assets and liabilities. Non-current assets include property, plant and equipment, computer software, goodwill and other intangible.

b)         Segment assets, liabilities and non-current assets by reportable segment

			Total Assets						Total Liabilities
			Six months ended				Year ended		Six months ended				Year ended
			30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000		31 December 2012 Audited £'000		30 June     2013 Unaudited £'000		30 June 2012 Unaudited £'000		31 December 2012 Audited £'000
EMEA			123,641		128,955		125,560		69,775		71,666		70,596
United Kingdom			111,848		109,454		104,392		34,928		64,518		48,414
Asia Pacific	Australia and New Zealand		24,086		29,313		26,842		12,146		14,768		11,809
	Other		39,774		38,572		43,159		9,364		8,660		9,182
	Total		63,860		67,885		70,001		21,510		23,428		20,991
Americas			39,463		42,297		38,835		11,121		10,947		11,757
Segment assets/liabilities			338,812		348,591		388,788		137,334		170,559		151,758
Income tax			6,970		3,981		6,970		11,107		2,581		12,612
			345,782		352,572		345,758		148,441		173,140		164,370

		Property, Plant & Equipment						Intangible Assets
	Six months ended					Year ended 31 December 2012 Audited £'000		Six months ended				Year ended 31 December 2012 Audited £'000
		30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000				30 June     2013 Unaudited £'000		30 June 2012 Unaudited £'000
EMEA		8,836		9,678		9,034		460		600		495
United Kingdom		7,253		8,904		7,968		43,365		42,760		42,712
Asia Pacific	Australia and New Zealand	1,345		1,639		1,454		107		129		100
	Other	2,620		2,814		2,599		154		66		116
	Total	3,965		4,453		4,053		261		195		216
Americas		7,449		8,650		7,858		563		593		674
		27,503		31,685		28,913		44,649		44,148		44,097

The below analysis in notes (c) revenue and gross profit by discipline (being the professions of candidates placed) and (d) revenue and gross profit generated from permanent and temporary placements, have been included as additional disclosure over and above the requirements of IFRS 8 "Operating Segments".

c)         Revenue and gross profit by discipline

	Revenue							Gross Profit
	Six months ended					Year ended 31 December 2012 Audited £'000		Six months ended				Year ended 31 December 2012 Audited £'000
		30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000				30 June     2013 Unaudited £'000		30 June 2012 Unaudited £'000
Finance and Accounting		232,308		237,895		465,378		107,367		114,661		220,561
Legal, Technology, HR, Secretarial and Other		115,722		109,551		219,980		53,982		55,076		106,422
Engineering, Property & Construction, Procurement & Supply Chain		90,258		90,703		177,883		52,024		53,905		102,817
Marketing, Sales and Retail		64,960		64,480		126,641		48,567		50,213		97,069
		503,248		502,629		989,882		261,940		273,855		526,869

d)         Revenue and gross profit generated from permanent and temporary placements

	Revenue							Gross Profit
	Six months ended					Year ended 31 December 2012 Audited £'000		Six months ended				Year ended 31 December 2012 Audited £'000
		30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000				30 June     2013 Unaudited £'000		30 June 2012 Unaudited £'000
Permanent		208,919		222,601		422,005		202,604		215,687		409,660
Temporary		294,329		280,028		567,877		59,336		58,168		117,209
		503,248		502,629		989,882		261,940		273,855		526,869

4.         Exceptional items

The exceptional item in the prior period refers to a restructuring cost taken by the Group in the first half of 2012 relating to changes in management structure where an entire layer of management was removed. The costs represented direct expenditure necessarily incurred by the restructuring. The expenditure did not include any ongoing costs of the Group.

5.         Financial income/(expenses)

		Six months ended				Year ended 31 December 2012 Audited £'000
		30 June   2013 Unaudited  £'000		30 June 2012 Unaudited £'000
Financial income
Bank interest receivable		251		423		907
Financial expenses
Bank interest payable		(350)		(342)		(1,191)

6.         Taxation

Taxation for the six month period is charged at 33.0% (six months ended 30 June 2012: 33.5%; year ended 31 December 2012: 36.5%), representing the best estimate of the average annual effective tax rate expected for the full year, applied to the pre-tax income of the six month period.

7.         Dividends

	Six months ended				Year ended 31 December 2012 Audited £'000
	30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year 31 December 2012 of 6.75p per ordinary share (2011: 6.75p)	20,798		20,778		20,778
Interim dividend for the period ended 30 June 2012 of 3.25p per ordinary share	-		-		9,856
	20,798		20,778		30,634
Amounts proposed as distributions to equity holders in the period:
Proposed interim dividend for period ended 30 June 2013 of 3.25p   per ordinary share (2012: 3.25p)	10,016		9,924		-
Proposed final dividend for the year ended 31 December 2012 of 6.75p per ordinary share	-		-		20,503

The proposed interim dividend had not been approved by the Board at 30 June 2013 and therefore has not been included as a liability. The comparative interim dividend at 30 June 2012 was also not recognised as a liability in the prior period.

The proposed interim dividend of 3.25 pence (2012: 3.25 pence) per ordinary share will be paid on 4 October 2013 to shareholders on the register at the close of business on 6 September 2013.

8.         Share-based payments

In accordance with IFRS 2 "Share-based Payment", a charge of £5.0m has been recognised for share options and other share-based payment arrangements (including social charges) (30 June 2012: £7.9m, 31 December 2012: £14.2m).

9.         Earnings per ordinary share

The calculation of the basic and diluted earnings per share is based on the following data:

	Six months ended				Year ended 31 December 2012 Audited
Earnings	30 June 2013 Unaudited		30 June 2012 Unaudited
Earnings for basic and diluted earnings per share (£'000)	21,454		18,768		36,197
Exceptional items (£'000) (note 4)	-		5,315		5,308
Earnings for basic and diluted earnings per share before exceptional items (£'000)	21,454		24,083		41,505
Number of shares
Weighted average number of shares used for basic earnings per share ('000)	306,210		305,602		305,345
Dilution effect of share plans ('000)	2,445		4,271		3,136
Diluted weighted average number of shares used for diluted earnings per share ('000)	308,655		309,873		308,481
Basic earnings per share (pence)	7.0		6.1		11.9
Diluted earnings per share (pence)	7.0		6.1		11.7
Basic earnings per share before exceptional items (pence)	7.0		7.9		13.6
Diluted earnings per share before exceptional items (pence)	7.0		7.8		13.5

The above results all relate to continuing operations.

10.        Property, plant and equipment

Acquisitions and disposals

During the period ended 30 June 2013 the Group acquired property, plant and equipment with a cost of £4.3m (30 June 2012: £4.6m, 31 December 2012: £7.9m).

Property, plant and equipment with a carrying amount of £0.4m were disposed of during the period ended 30 June 2013 (30 June 2012: £0.1m, 31 December 2012: £0.3m), resulting in a loss on disposal of £46k (30 June 2012: loss of £5k, 31 December 2012: loss of £5k).

11.        Trade and other receivables

	30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000		31 December 2012 Audited £'000
Current
Trade receivables	158,052		159,161		141,706
Other receivables	6,237		5,112		4,653
Prepayments and accrued income	34,655		37,285		36,148
	198,944		201,558		182,507
Non-current
Prepayments	3,827		5,209		3,310

12.        Trade and other payables

		30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000		31 December 2012 Audited £'000
Current
Trade payables		4,868		5,536		9,605
Other tax and social security		41,318		42,299		39,709
Other payables		14,619		22,777		16,679
Accruals		65,571		71,179		71,920
Deferred income		667		882		820
		127,043		142,673		138,733
Non-current
Deferred income		2,993		2,569		2,653
Other tax and social security		81		53		126
		3,074		2,622		2,779

13.        Cash flows from operating activities

		Six months ended				Year ended 31 December 2012 Audited £'000
		30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000
Profit before tax		32,021		28,243		57,003
Exceptional items (note 4)		-		7,845		7,834
Profit before tax and exceptional items		32,021		36,088		64,837
Depreciation and amortisation charges		8,125		5,830		15,073
Loss on sale of property, plant and equipment, and computer software		46		5		5
Share scheme charges		4,089		7,461		11,884
Net finance costs/(income)		99		(81)		284
Operating cash flow before changes in working capital and exceptional items		44,380		49,303		92,083
(Increase)/decrease in receivables		(12,442)		(11,750)		7,454
Decrease in payables		(14,613)		(2,233)		(5,066)
Cash generated from underlying operations		17,325		35,320		94,471

14.        Cash and cash equivalents

		30 June 2013 Unaudited £'000		30 June 2012 Unaudited £'000		31 December 2012 Audited £'000
Cash at bank and in hand		47,769		47,907		62,431
Short-term deposits		6,212		9,536		8,338
Cash and cash equivalents		53,981		57,443		70,769
Bank overdrafts		(6,366)		(25,031)		(9,396)
Cash and cash equivalents in the statement of cash flows		47,615		32,412		61,373

The Group operates a multi-currency notional cash pool. Currently the main Eurozone subsidiaries and the UK-based Group Treasury subsidiary participate in this cash pool, although it is the Group's intention to extend the scope of the participation to other Group companies going forward. The structure facilitates interest and balance compensation of cash and bank overdrafts.

Responsibility statement:

            The Directors confirm that, to the best of their knowledge:-

a)   the condensed set of interim financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting';

b)   the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

c)   the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

On behalf of the Board

S Ingham                                                                                  A Bracey

Chief Executive Officer                                                               Chief Financial Officer

            13 August 2013

Copies of the Interim Financial Statements are now available and can be downloaded from the Company's website

http://www.page.com/investors/reports-and-presentations/presentations-and-webcasts/2013.aspx

 

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